Mining to New Caledonia

(Last updated: 31 Jul 2007)

Trends and opportunities

The market

In terms of resources, New Caledonia has 25 per cent of the world’s known nickel reserves (estimated to be 40 million tonnes of nickel metal contained), which positions New Caledonia first – ahead of Cuba, Canada, Indonesia, Australia, South Africa and the Philippines. 

The local economy is driven by the nickel industry, which makes up 12 per cent of GDP, employs 3200 workers, and generates 90 per cent of total exports. The increased demand for nickel, especially by the Asian market, and the longer-term increase in price has been beneficial to New Caledonia.

Australia's market share in the supply of mining products, equipment and services to New Caledonia is increasing due to:

• The new import tax regime, applicable regardless of the country of origin
• The increased focus on potential suppliers in neighbouring countries (particularly Australia)
• Changing purchasing patterns

To illustrate this willingness to purchase from Australia, Inco Limited (which has merged with fellow Canadian mining company Falconbridge), and its engineering groups has offices in Brisbane.

Australia’s mining exports represent approximately 30 per cent of total imports of the New Caledonian mining industry. This includes:

• combustible products (coal) - used by the nickel smelters in Noumea
• spare parts
• steel products
• chemicals

Projects underway to develop nickel-processing plants using new technologies or upgrading existing facilities include:

Société Le Nickel (SLN):

• SLN owns and operates four mine centres (Kouaoua, Thio, Nepoui and Tiebaghi) to feed ore to their smelter in Doniambo.
• Currently, the Doniambo smelter takes in ore grading three per cent nickel content at a rate of 2.5 million tonnes of ore per annum.
• To increase production, SLN refurbished one of its three Demag electric furnaces at Doniambo, removed the bottlenecks in the plant by the purchase of a new conveying system and stacker reclaimer, and upgraded major parts of the plant.
• SLN has a target a maximum production capacity of 75,000 tonnes per year by 2007.
• SLN is also building ship loading facilities at Tiebaghi (Northern Province, near Koumac), for the mine site to reach a production of one million tonnes of nickel ore (currently 250,000 tonnes per year).
• A beneficiation plant, similar to the one SLN runs at Nepoui, will also be built in the next couple of years.

Goro Nickel:

• Inco Limited is undertaking the Goro nickel-cobalt project with an estimated annual capacity of 60,000 tonnes of nickel and over 4,000 tonnes of cobalt based on high pressure acid-leaching technology at the Goro laterite deposit (south of New Caledonia). 
• The project is valued at US$1.878 billion.
• SNC Lavalin and Foster Wheeler have been awarded the new contract to provide services related to the engineering, procurement and construction management.
• Based on the final results of the project review, construction should be carried out over a period of approximately 35 months. Initial production is estimated to begin in September 2007.

The Koniambo project:

• Inco Limited is undertaking the Koniambo project (formerly a Falconbridge project before Falconbridge merged with Inco) in joint venture with local company Société des Mines du Sud Pacifique (SMSP). 
• The feasibility study for the nickel-laterite Koniambo project has been completed.
• Koniambo is a world-class resource. Nickel is contained in both saprolite and limonite with grades that compare favourably with other laterite deposits in the world. The saprolite orebody contains 142.1 million tonnes of measured and indicated resources grading 2.13 per cent nickel and 156.0 million tonnes of inferred resources grading 2.2 per cent nickel.
• Nickel would be extracted using a new smelting process to produce ferro-nickel. Initially, nickel will be extracted from the saprolite part of the orebody.
• In future expansions, there are plans to extract nickel from the limonite orebody, an undiluted inferred resource of 100 million tonnes of 1.6 per cent nickel, using a hydrometallurgical process.

Each year in New Caledonia, seven million tonnes of nickel ore are extracted (4.5 million tonnes garnierites and 2.6 million tonnes laterites), of which four million tonnes are exported to Asia and Australia. The remaining three million tonnes are processed locally by Société Le Nickel.

Three-quarters of the resources in New Caledonia are constituted by limonites (highly weathered low grade ore, suitable for hydro-metallurgical processes), and 25 per cent by saprolites (high grade ore, or garnierites, suitable for smelting into ferro-nickel).

Opportunities

With major technical changes and the development of new hydro-metallurgical processes, New Caledonia is arousing renewed interest among the global nickel producers.

If all upcoming projects go ahead, representing in excess of US$3.5 billion, New Caledonia is poised to shift position from a supplier of feed ore to become the world's largest nickel producer within the next 10 to 15 years.

The development of new mining activities is leading these companies to look for a suitable source of 'know-how' in close proximity. Due to these reasons, there is potential for Australia to supply the following:

• crushing and drilling equipment
• spare parts
• chemicals
• material handling
• training and engineering services
• conveyor belts and parts
• steel products
• explosives
• environmental services
• hoses, pipes and fittings, and pumps
• safety equipment and lifting gear

Australia is seen as an ideal source of supply in solving machinery breakdowns. Spare parts are a large share of Australia’s exports to New Caledonia.

Competitive environment

Until recently, the main source of supply for mining products and equipment to New Caledonia was from the European Union (EU) countries. This was mainly due to two factors:

• A special import regime with Custom Tax exemption for EU members, which had an impact on price competitiveness
• A lack of knowledge of the Australian mining industry capabilities 
• At present, there are six large companies involved in the New Caledonian mining industry:
  • Société Le Nickel (SLN) – owned by the Groupe ERAMET(France). SLN processes 45 per cent of the ore from New Caledonia in its smelter at Doniambo (Noumea)
  • Société des Mines du Sud Pacifique (SMSP) – owned by the Northern Province and accounts for almost 70 per cent of total nickel ore exports.
  • Société des Mines de la Tontouta (SMT) – owned by the Groupe Ballande
  • Société Miniere George Montagnat (SMGM)­ – privately owned by the Montagnat family
  • New Inco – a Canadian company formed by the merger of Inco and Falconbridge; at the time of merger, the world's second and third largest nickel producing companies respectively
  • Queensland Nickel Inc – owned BHP Billiton, has no mining operations as yet

The development of new nickel projects will play an important role in the development of the New Caledonian economy. The government has legislated on conditions to employ a foreign labour force, and on a new fiscal regime (including import tax exemptions) applicable to new and existing mining and metallurgical companies and their subcontractors.

Tariffs, regulations and customs

All mining companies benefit from exemptions to the General Import Tax on a number of products that are directly related to their mining activities, for example, capital equipment.

New investment projects, and extension projects, benefit from a total import duties exemption.

Import taxes are calculated on the cost, insurance and freight (CIF) value of goods.

Generally, merchandise coming into New Caledonia is subject to:

• General Import Tax (TGI) – 0 to 31 per cent depending on product
• Basic Import Tax (TBI) – 5 per cent
• Customs Duty – from 0 to 20 per cent (only applicable to imports from non-EC countries)
• Conjunctural Tax – from 15 to 50 per cent (applicable on some products which are locally manufactured such as beer, chocolate, pasta, ice cream, etc.)
• Airfreight Tax - 8 per cent (please note; airfreight is not subject to TBI)
• Port Tax – 1 per cent

Industry standards

European Standards (compliance with EC standards) are required for electrical, safety equipment and building products.

Equivalence with Australian or International Standards can be found.

More information

To obtain information on duties applicable to your product, please contact the local customs, Service des Douanes de Calédonie, email: douanes.nc@offratel.nc

Marketing your products and services

Market entry

If you are considering entering the New Caledonian mining industry, it is advisable to:

• Make regular visits to mining companies to help build relationships
• Network with New Caledonian and Australian representations of companies such as Inco Limited (based in Brisbane), and their engineering, procurement, and construction management (EPCM) service providers
• Develop relationships with Australian export agents dealing with local mining companies
• Identify existing local or international suppliers and their distribution network
• Identify other potential customers or prescribers related to the mining industry (maintenance contractors, engineering companies, etc.)

To be successful in New Caledonia, you will need to regularly visit the market. Australian companies should be prepared to translate technical literature into French or use interpreting services when required. Return correspondence may be in English, if the company’s staff understands and uses English.

When presenting your product to local mining companies, you will need to consider the following:

• What is the competitive advantage compared to existing supplier?
• Are you willing to adapt your product to suit the retailer?
• Are you ready to send product for trial?
• What distribution channels do you plan to choose to market the product (direct, through local/export agents)?

Austrade organises a mining supply mission to New Caledonia once a year. The mission's objective is for participants to gain an insight to the mining sector in New Caledonia and its key players, and to have the opportunity to undertake discussions with key technical and purchasing staff.

Distribution channels

Distribution channels can be established:

• by going direct to mining companies  
• via Austrade's network of contacts in the mining industry
• through Australian export agents
• by appointing a local agent/distributor (Austrade can help you identify an agent)

Transport

One cargo vessel services New Caledonia out of Australia every week. The journey is approximately three to four days. The volume of sea freight from Australia is around 4000 containers per year. 

Airfreight is available on all passenger flights. Two airlines service New Caledonia out of Australia; QANTAS and the local airline, Air Caledonie International, have regular flights from Australia to New Caledonia from Sydney and Brisbane.

There are no dedicated air cargo services out of Australia to New Caledonia.

Using the services of a freight forwarding agent is the simplest way to export your goods to New Caledonia especially with regard to language barriers and specific customs requirements.

Links and industry contacts

Mining-related resources

Department for Mining and Energy
B.P 465
98845 Noumea Cedex
Tel: 687 27 02 49
Fax: 687 27 23 45

Association of the New Caledonian Mining Industry
B.P 166
98845 Noumea Cedex
Tel: 687 27 42 43
Fax: 687 27 25 36

Inco Limited - www.inco.com
Société Le Nickel (SLN) - www.eramet.fr

Mines Magazine, Recto Verso (French-language)
Email: recto@canl.nc to request a copy

Government, business and trade resources for New Caledonia

New Caledonian Economic Development Board - www.adecal.nc
B.P 2384, 98845 Noumea Cedex
Tel: (687) 249 077
Fax: (687) 249 087

Syndicat des Commercants Negociants (Traders Association)
PO Box M3
98849 Noumea Cedex
Tel: (687) 27 54 10
Fax: (687) 27 61 48

Syndicat des Importateurs et Distributeurs de Nouvelle Calédonie
(Importers and Distributors Association)
PO Box 11496
98802 Noumea Cedex
Tel: (687) 25 45 38
Fax: (687) 25 45 39

New Caledonian Bureau of Statistics
B.P 823, 98845 Noumea Cedex
Tel: (687) 275 481
Fax: (687) 288 148
Email: itsee@itsee.nc

New Caledonian Chamber of Commerce and Industry
B.P M3, 98849 Noumea Cedex
Tel:  (687) 243 100
Fax: (687) 243 131

New Caledonian Customs Department
B.P 13, 98845 Noumea Cedex
Tel: (687) 265 781
Fax: (687) 276 497
Email: douanes.nc@offratel.nc

Business Directories - www.annuaires.net 
Kaori - www.kaori.nc New Caledonia local portal

Service providers:

Financial

Banque Caledonienne d'Investissement – www.bci.nc
Societe Generale – http://groupe.socgen.com/sgcb

KPMG Peat Marwick
Email: info@kpmg.nc

PricewaterhouseCoopers
Email: pwc.audit@offratel.nc

@com Audit Pacifique-Cofigex - Local representative for Ernst & Young
Email: audit@acomaudit.com

Legal

Societe Professionnelle d'Avocats Louzier-Roger-Fauche
Email: avocats.lrf@mls.nc

SELARL d'Avocats POC et Associes
Email: pocnc@lagoon.nc

SELARL de Greslan-Briant
Email: acocadgb@canl.nc

Juriscal - Juriscal works with PricewaterhouseCoopers
Email: juris@offratel.nc

Internet service providers

CANL - www.canl.nc
Micro Logic System - www.mls.nc
Offratel - www.offratel.nc

Media

Les Nouvelles Caledoniennes - www.lnc.nc The only daily newspaper published in New Caledonia

Australian resources

Australian Consulate General
7^th Floor, 19-21 Avenue Foch, City Centre
PO Box 22
98 845 Noumea
New Caledonia
Tel: (687) 272 414
Fax: (687) 278 001

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au

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